The Maharashtra Authority of Advance Ruling (AAR) ruled that the Input Tax Credit (ITC) is available to Applicant on GST charged by the service provider on the hiring of bus/motor vehicle having a seating capacity of more than thirteen people for the transportation of employees to & from the workplace but only after February 1, 2019.
The Applicant, M/s Tata Motors Limited is in the business of manufacturing commercial and passenger vehicles. The Applicant has engaged a service provider to provide transportation facilities to its employees in non-air conditioned bus for commuting to and from the workplace.
As per Section 17(5)(b)(i) of Central Goods & Service Tax Act. 2017 11C of GST paid on hiring of motor vehicles having seating capacity of up to 13 people is blocked for 1TC. In lieu of transportation facilities provided to employees, applicants are recovering some nominal amount from them.
The applicant has sought the ruling on the issues whether input tax credit (ITC) is available to Applicant on GST charged by service provider on hiring of bus/motor vehicle having seating capacity of more than thirteen person for transportation of employees to and from workplace. If ITC is available, whether it will be restricted to the extent of cost borne by the Applicant (employer).
The other issue raised was whether GST is applicable on nominal amount recovered by Applicants from employees for usage of employee bus transportation facility in non-air conditioned bus.
The two-member bench of A.A. Chaure and P.Vinitha Sekhar ruled that GST not is applicable on nominal amount recovered by Applicants from employees for usage of employee bus transportation facility in non-air conditioned bus.
The authority further ruled that ITC is available to Applicants on GST charged by service providers on hiring of bus/motor vehicles having seating capacity of more than thirteen persons for transportation of employees to & from the workplace but only after February 1, 2019. And it will be restricted to the extent of cost borne by the Applicant (employer).
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